“The number of Americans filing new claims for unemployment benefits fell to the lowest level in nearly 8-1/2 years last week, suggesting the labor market recovery was gaining traction. Initial claims for state unemployment benefits declined 19,000 to a seasonally adjusted 284,000 for the week ended July 19, the Labor Department said on Thursday.” Story at…
http://www.cnbc.com/id/101863463
NEW HOME SALES (Beifing.com)
“New home sales fell 8.1% in June to 406,000 from a
downwardly revised 442,000 (from 504,000) in May…Affordability concerns, as a
result of elevated new home price premiums, have led to relatively stronger
growth in the existing home sector.” Additional commentary and charts at…
https://www.briefing.com/Investor/Calendars/Economic/Releases/newhom.htm
FUNNY BUSINESS
WITH RETAIL SALES DATA? (3-THINGS) (Advisor Perspectives)
“In June, the non-seasonally adjusted level of retail
sales was $438.47 billion. That level represents a 5.59% decline from the
reported May numbers. However, once the number were adjusted for "seasonality,"
retail sales showed an increase of 0.25%. While I do agree that some
adjustment does need to be made for very volatile data series, it seems odd
that the Census Bureau, which compiles and reports the data, would make such a
drastic swing from historical tendencies…[Lance notes the following]…only in
2013 and 2014, have the seasonal adjustments contributed to the total retail
sales number.” [In other years, the seasonality numbers reduced actual numbers.
In fact later in the article Lance
notes that]…while the seasonally adjusted data shows a sharp uptick in sales
since February of this year, the simple 12-month average of the non-seasonally
adjusted data isn't confirming it.”
Interesting article by Lance Roberts posted at Advisor Perspectives, dShort.com
at…
http://www.advisorperspectives.com/dshort/guest/Lance-Roberts-140724-3-Things.phpIt also covered GDP estimates and the SEC vote to allow limits Money Market fund redemption and Money Fund values to float, i.e., no longer valued at a fixed 1-dollar.
MARKET REPORT
Thursday, the S&P 500 was
up a point to 1988 (rounded).
VIX rose about 3% to 11.87. The yield on the 10-year Treasury Note was rose to 2.51% at the close.
CORRECTION WATCH
(1) No Correction:
Market Internals are positive. The Percentage of Stocks
above their 200-dMA remained 63% Wednesday (data is a day late). 61% and falling is the trouble point for this
stat. RSI is only 51 (70 is
overbought). The S&P 500 remained
7.5% above its 200-dMA. 10% is the level that frequently indicates a
correction.
(2) Correction Now:
Statistically, the index is too “quiet” (as it has been
since mid-May) and a pullback is suggested anytime. (By “quiet” I mean that the
day-to-day moves are unusually small.) Chart
wise, the index remains near the top of the 3-month chart, upper trend-line
today (Thursday) and the Index is making a double top. That could mean the Index is ready for
pullback mode.
Overall it appears that the Index can go a bit higher. Correction? Probably, not yet.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks
advancing (NYSE) was up to 52% at the close Thursday. (A number above 50% for the 10-day average is
generally GOOD news for the market.) New-highs outpaced New-lows Thursday. The spread (new-highs minus new-lows) was +164.
(It was +152 Wednesday.) The 10-day moving average of change in the spread increased
to +12. In other words, over the last 10-days, on
average, the spread has INCREASED by 12 each day. The smoothed 10-dMA of up-volume
was UP today and the Internals remained positive on the market. 
Market Internals are a decent trend-following analysis of
current market action, but should not be used alone for short term trading.
They are usually right, but they are often late. They are most useful when they diverge from
the Index. In 2013, using these
internals alone would have made a 16% return vs. 30% for the S&P 500 (in on
Positive out on Negative – no shorting).
Of course, few trend-following systems will do well in an extreme
low-volatility, straight-up year like 2013.
NTSM
The NTSM analytical model for LONG-TERM MONEY remained
HOLD Thursday. Sentiment fell to 75%-bulls
(5-dMA of {bulls/(bulls+bears)} for funds invested in selected Rydex/Guggenheim
funds at the close on Wednesday (data is a day late). (83% is the current
negative level for the Sentiment indicator.) This value was 85%-bulls on 19
May. Price, Sentiment, Volume & VIX indicators are neutral.
MY INVESTED POSITION
I increased my stock allocation to 50% invested in stocks
on 26 March because of the NTSM indicators turned positive 24 Mar at the
close. 50% in stocks is fully invested
for me, given my age (semi-retired) and the risk inherent in today’s stock
market. I am watching closely to see if it is time to reduce my long-term stock
holdings.--INDIVIDUAL STOCKS--
ENSCO (ESV): HOLD (Earnings announce 31 July)
For my initial discussion see the NTSM blog at:
http://navigatethestockmarket.blogspot.com/2014/05/coppock-curve-says-stock-crash-nowblow.html
Ensco has surpassed the mean and median analyst price targets so I rate it hold, but the 6% yield is worth owning. Not everyone agrees. Here is an opposing view:
DON’T BUY ENSCO: RAYMOND JAMES (Seeking Alpha)
“While some analysts are beginning to see value in shares of battered offshore drillers, the team at Raymond James thinks conditions will get worse before they get better. After a strong decade, the deepwater drilling rig market is facing a multi-year down-cycle, RJ says; most previous offshore drilling cycles have been short-lived thanks to sudden demand shocks that have self-corrected relatively quickly, but this downturn is more of a new rig supply problem compounded by a moderation in offshore spending from the suddenly “return driven” multinational major oil companies - meaning this down-cycle should be more drawn out than usual.” Commentary at…
http://seekingalpha.com/news/1854605-its-still-not-time-to-buy-offshore-drillers-raymond-james-says?uprof=44
